Western Union Co, the world's largest payment transfer company, said it agreed to buy Travelex's Global Business Payments division for about 606 million pounds ($968.7 million), to expand its international business payments services. The transaction, Western Union's first major deal since Hikmet Ersek took over as CEO last year, is expected to boost the company's global business payments segment, which contributed 14 percent of the company's overall revenue last year.
"The acquisition of Travelex Global Business Payments provides our business-to-business operations immediate scale, further geographic reach, additional customer opportunities, and added product capabilities," Ersek said on a conference call with analysts. The deal is expected to hurt Western Union's GAAP earnings per share by about 2 cents in 2011 and by about 4 cents in 2012 due to deal and integration costs and non-cash amortisation expenses - but is expected to be cash accretive in 2012.
However, Western Union reaffirmed its previously announced outlook for 2011. Private equity firm Apax Partners - which bought a majority stake in Travelex Holdings in 2005 for about $2 billion - will maintain its stake in the company after the deal, a person familiar with the matter told Reuters.